How to Set Up a Living Budget
Contrary to what you may be thinking, the point of a budget is not to immediately squirrel away every single penny that comes into your possession. The main point of a budget is to make sure of two things: that your basic needs are taken care of each month; and that you are completely aware of how much cash you have throughout the month. When you figure out what type of spender you are, you can create a working budget that helps you meet your financial goals.
Instructions
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Assess Your Spending Habits
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First you have to figure out what kind of spender you are: You may be the frugal type or the extravagant type. Being frugal means that you bargain hunt, pass up wild spending sprees and generally keep a fairly tight rein on your cash. You need a budget just as much as an extravagant spender, because you may be skimping on the pleasures of life when you could afford to live much more pleasantly. The good news, though, is that your inherent thriftiness will probably make it easier to stick to your budget and build your savings.
The extravagant type often finds it hard to live on a budget. If you don't keep track of your expenditures and rarely look at the price of purchases, you may have extra work to do when creating a budget.
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References
Resources
- Photo Credit budget, payment allocation image by Kalani from Fotolia.com
Comments
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Those are all very good tips. I've been doing these things for a month without thinking about it, and I had a lot of extra money in the bank on Wednesday morning. :)
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marlin90
May 30, 2010
Living on a budget is all about cutting out the extra expenses. A big expense for me was the cell phone bill, I imagine that is how it is for most people. By switching to prepaid I save about 50 a month. By bill use to be about 80 a month, with my new net10 plan, the flat 10 cents a minute means im spending about 30 a month instead of 80. That 50 a month can really add up.
